The opinion of the court was delivered by: HAIGHT
MEMORANDUM OPINION AND ORDER
Defendant, a Turkish corporation, moves pursuant to Rule 12(b)(2), F.R.Civ.P., for an order dismissing the complaint for lack of jurisdiction. The motion raises the question whether the holding in Shaffer v. Heitner, 433 U.S. 186, 45 U.S.L.W. 4849, 53 L. Ed. 2d 683, 97 S. Ct. 2569 (1977) precludes quasi in rem jurisdiction based upon plaintiffs' prior attachment of defendant's New York bank account. Answering that question in the negative, we deny the motion.
The wrongful death action underlying the instant application is brought by decedent's executors, and stems from the crash of an F-28 aircraft operated by defendant Turk Hava Yollari, A.O. ("THY") near Istanbul, Turkey on January 30, 1975. Plaintiffs are New York residents and initiated this litigation in a federal forum based upon diversity of citizenship, 28 U.S.C. § 1332.
Originally only in personam jurisdiction was averred, based upon defendant's "doing business" in this district within the meaning of New York C.P.L.R. § 301. A motion to dismiss for lack of jurisdiction elicited that this claim was predicated on the belief that THY employed a sales agent in the forum who may also have conducted other business here on defendant's behalf. This allegation was hotly disputed by movant, and this Court, upon consideration of all the papers then before it, held in a Memorandum and Order dated June 28, 1976 that plaintiff's showing was insufficient to support its claim that THY was present in this district. Leave was granted plaintiff, however, to supplement its submission after having taken discovery on the question of jurisdiction.
In consequence of this ruling, a set of interrogatories was served upon defendant, and an unfruitful effort made to depose an officer of THY's purported agent. The responses to plaintiffs' written questions categorically deny the existence here of any individual or organization systematically conducting business for defendant, although they do admit the maintenance of an account at the Chase Manhattan Bank, the assets of which are utilized in the out-of-state purchase of airplane replacement parts.
Just prior to the expiration of the period set for this jurisdictional discovery, plaintiffs, by order to show cause applied pursuant to C.P.L.R. § 6201(1) for an order of attachment to be served upon defendant's New York bank account. This request was granted by opinion dated September 30, 1976 and attachment order dated October 4, 1976, and THY's deposits at the Chase Manhattan Bank, amounting to approximately $100,000 were thus subjected to the Court's jurisdiction. Thereafter, defendant's counsel filed with the Clerk of the Court a bond in the amount of $100,000, and the Court on November 9, 1976 discharged the attachment.
In addition to restraining THY's bank account, plaintiffs also received an extension of their time to conduct discovery upon which personal jurisdiction might be based. Through a second set of interrogatories, plaintiffs learned that THY had executed in Turkey a freight forwarding contract with a New York corporation. No further attempt was made to bolster the initial assertion that defendant was doing business in New York, and even if this contention has not been formally abandoned by plaintiffs, we would find on the record now before us that THY has had insufficient contacts with the forum to render it personally liable for a judgment of this Court. Thus, jurisdiction over THY rests solely upon the attachment.
On June 24, 1977 the Supreme Court handed down its opinion in Shaffer v. Heitner, supra -- a shareholders' derivative suit initiated in Delaware's Court of Chancery against numerous directors and officers of the Greyhound Corporation and certain of its subsidiaries, all of which are chartered under the laws of Delaware. The litigation was premised upon defendants' commission of acts of malfeasance in Oregon which resulted in the entry there of a substantial money judgment against the corporation for violation of the federal antitrust statutes and of a fine assessed there in a related action for criminal contempt.
Since personal jurisdiction could not be obtained over these individuals, the suit proceeded by the sequestration of defendants' stock in the Greyhound company which was valued at over one million dollars. Sequestration is the equity counterpart of attachment, and is effected by the placing of a "stop transfer" order on the books of the company whose stock is being seized. This procedure is possible because, under Delaware law, shares in its corporation are deemed to be present in the State regardless of the actual physical location of the certificates. Moreover, there is no limited appearance available under Delaware law (i.e. the opportunity of a non-resident to defend his seized property on the merits without subjecting himself to a judgment in excess of the value of such property), as indeed, the announced purpose of the sequestration statute is to compel non-residents to submit to the personal jurisdiction of Delaware's courts.
The defendants in Shaffer attacked the sequestration statute, thus applied to them, as violative of the Due Process Clause of the Fourteenth Amendment (1) because it permitted the state courts to exercise jurisdiction despite the absence of sufficient contacts among the defendants, the litigation, and the State of Delaware; and (2) because it authorized the deprivation of defendants' property without providing adequate procedural safeguards. The Delaware courts perceived no Constitutional blemishes in the statute. The Supreme Court reversed on the basis of the first of these contentions.
Justice Marshall's opinion for the majority
extends to assertions of state court jurisdiction in rem those standards of International Shoe3 and its progeny which govern jurisdiction in personam. International Shoe held that a nonresident defendant was subject to the forum's in personam jurisdiction if:
". . . he have certain minimum contacts with it such that the maintenance of the suit does not offend 'traditional notions of fair play and substantial justice.' Milliken v. Meyer, 311 U.S. 457, ...